Up, up and invest

Mexico poised for major aircraft purchases; but poor infrastructure could stem growth.

In the coming years, Mexico is set become one of the largest purchasers of commercial aircraft in the world. This growth will be driven by a growing middle class who will increasingly take to the skies not just for holidays but for business. According to forecasts published recently by Airbus, flights in Mexico will double from 0.5 to one flight per person per year by 2040.

An airline executive based in Mexico explained, “The sector is undoubtedly experiencing a period of post-covid optimism – figures suggest a strong recovery for flight demand. These figures can sometimes be overly optimistic, but we are also seeing an uptick in manufacturing demand too. As flights resume and airports return to capacity, there will be investment opportunities in upgrading and expanding infrastructure.”

“The sector is undoubtedly experiencing a period of post-covid optimism – figures suggest a strong recovery for flight demand.”

Airline executive, Mexico

Renewed investment zeal in the country’s poor airport infrastructure could not come at a better time. Last month, the World Trade Organisation stated that Mexico was for the first time recorded as the third most visited country in the world. Last year, airlines Volaris, JetSmart and LATAM put in orders for a combined 92 aircraft from Airbus. Naturally, such growth will necessitate an increase in the number of professionals to staff and support the new aircraft. Airbus estimate that some 33,000 pilots and 43,000 technicians will be needed by 2040.

An aviation specialist consultant based in Mexico explained the commercial dynamics, “Right now regional low-cost carriers Volaris and Viva Aerobus are growing rapidly. Others have fared less well. Interjet and now flag carrier Aeroméxico are facing challenging economic realities. The poor balance sheet of both entities, hit hard during Covid and faced with low capital reserves, means they are now struggling to renew much of their fleet. The major Mexican airlines have been plagued by financial weaknesses for a long time, surprisingly it is the lower-cost carriers that are in a better fiscal position.”

“Right now regional low-cost carriers Volaris and Viva Aerobus are growing rapidly. Others have fared less well.”

Aviation Consultant, Mexico

It helps that air traffic in Mexico recovered faster than many of its regional peers in large part because the country did not implement restrictions on the arrival of foreign travellers during Covid. The main challenge in accommodating this growth is in Mexico’s airport infrastructure which has lacked meaningful investment for many decades.

The airline executive added, “Both Volaris and Viva are exploring the global market, opening several routes to Latin America with some success. But to appeal to the business flyer market seeking international routes especially to Asia, Mexico’s airport infrastructure will have to improve.”

The decision of the AMLO administration to cancel the capital’s gleaming new airport – Mexico City Texcoco Airport – sent jitters through the industry. A new smaller airport – built on a disused air force runway – to complement the capital’s Benito Juárez International Airport will be inaugurated this month. So far, only a handful of small low-cost carriers servicing domestic destinations have begun scheduled operations – not quite the new gateway to the country the government had touted. If Mexico is to fulfil its potential to become a major aviation hub, major infrastructure investments must be made and now.

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